Banks seal Hotel Park Plaza

Rajinder Nagarkoti

Tribune News Service

Chandigarh, August 26

After a four-hour high-voltage drama, officials of Punjab National Bank (PNB), the United Bank of India (UBI) and Asset Reconstruction Co Ltd (Arcil), a bad loan restructuring firm, sealed Hotel Park Plaza in Sector 17 with the help of the local police and the Administration over alleged non-payment of loans of Rs 130 crore (including interest).

Acting on an application filed by the banks, District Magistrate Ajit Balaji Joshi had, on August 3, allowed them to take the physical possession of the hotel.

Before completing the sealing exercise, around 200 guests, including actor Mangal Dhillon, were asked to leave the hotel by the bank officials. Left with no other option, some of the guests even left their breakfast on the table. As many as 60 rooms of the hotel were booked.

The exercise started at 10 am today when the bank officials reached the Sector 17 police station to take the help of the police for completing the exercise of taking over the hotel property.

The hotel management had deployed bouncers and staff to thwart the takeover. 

At the entrance gate of the hotel, the police resorted to a mild lathicharge to enter the hotel premises. The hotel staff raised slogans against the UT Administration and the banks. Inside the hotel premises, the banks officials  made announcements using a loudspeaker for the guests and exhibitors, who were there for an exhibition of clothes, asking them to leave the hotel. 

After a four-hour ordeal, the hotel was sealed at 1.45 pm. Hotel CMD HS Arora, an NRI, targeted the bank officials and the local Administration alleging bias. He said he would approach Prime Minister Narendra Modi.

Meanwhile, SN Gupta, Chief Manager, PNB, said they completed the exercise on the DM’s order as the hotel management had failed to clear the loan. 

SARFAESI Act

The banks approached the DM to take the physical possession of the hotel under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.

James Hotels Ltd took  Rs 85-crore loan

The company, James Hotels Limited, which was running the hotel, had taken loans of Rs 85 crore from the banks, starting in 2007. However, it stopped paying instalments in 2014 in spite of an operational hotel. The PNB had issued a notice for default of loan in August 2014. The banks, including the PNB, had declared the said loan as non-performing assets (NPAs) and a litigation was pursued with the Debt Recovery Tribunal, Chandigarh, for the recovery of the default amount.